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I'm designing a logo for an event put on by a non-profit, and I am giving them a really good deal on it as they cannot afford what it is worth. It is a cause I believe in so I would like to help them succeed.

That being said, if they decide to sell merchandise with the logo, would it be inappropriate to expect a portion?

I am thinking of granting rights to all printed and online media, but merchandising rights would be a separate licensing fee (is this how I would word it?).

Would this be alright to put in a contract? I know most logos sign over all-rights, but the client would also pay more for this clause.

Edit: the non-profit is not a charity, and receives funding and grants. They also make quite a bit of money from this event and others, as well as member fees. I am privy to their available accounts and know they can afford to pay, but they don't understand the value of graphic design.

Also, if this question has been asked before, please send me a link. I looked and couldn't find one.

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    Especially if it's a small entity, I see that as pretty heartless personally
    – Zach Saucier
    Jun 13, 2018 at 3:49
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    I agree with the previous comment, assuming it's a small organization. If they cannot afford what you think it's worth now, then they also will not be able to afford it when they sell merchandise (probably sold by volunteers) to raise funds for charity. Also, if these royalties are payable in perpetuity, they will end up paying you a lot more long-term, so for you it's an investment. If it's not in perpetuity, then for you it's a loan. In both cases, you aren't really helping them succeed.
    – BenoitLussier
    Jun 13, 2018 at 4:56
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    You probably need to cost your work properly, and let them know the value and discount in writing, to take into account when preparing your taxes. Making this donation in kind can be quite tax-efficient in some systems.
    – Chris H
    Jun 13, 2018 at 9:13
  • I'm sorry I didn't clarify earlier, but the non-profit is not a charity. They make money off the event each year and receive funding, but they are also unaware of the value of design work, and do not understand how a logo can cost so much money. I'd like to do it for cheap for them, but then don't want to give them all rights.
    – Esther
    Jun 13, 2018 at 17:31
  • "I am giving them a really good deal on it as they cannot afford what it is worth" (to whom?) Fixed costs, accrued costs, fixed expenses, etc. for which you can show receipts are deductible in some jurisdictions. Your effort is what you are donating and your perceived self-worth. Thank you for your generosity. That said, you can limit your design use in any way beyond the stipulated event or by a date or by its intended application (on clothing, say.) You could conceivably stipulate a royalty and then donate that "cash" amount to the cause for a consideration of your mutual agreement.
    – Stan
    Jun 13, 2018 at 18:30

3 Answers 3

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None.

Generally you don't charge for royalties on logos, since a sold logo should be free of limitation. When its paid, its paid in full and the company should be free to use it anywhere. Usage limits can be set on specific artwork however, like an illustration, a photograph, a video.

After all people invest in logos so they can benefit from it, financially or otherwise. You want t-shirts and cups, you do your own non-profit and logo no offence.

Also not sure what kind of non-profit this is, but merchandise will likely not make them millionaires. A blank t-shirt may cost 5$ and a branded t-shirt 8-10$ (just an example). From those 3-4$ earned per t-shirt, they will have additional costs (printing, transport, shipping, lunch for volunteers, etc, etc). And how many t-shirts will a non-profit produce? If you really believe in this cause just let it go and let them use it.

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    Possibly, but why don't you add a non-hypothetical answer then? What can we know about a situation other than what the OP is saying? Where did the OP mention what kind of non-profit this is?
    – Lucian
    Jun 13, 2018 at 11:17
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    Assumptions. Non-profit or not it is irrelevant, the client pays for a logo, then they use it. How much they are paying, how much the designer is accepting, not our business. What they do with the logo, not the designer's business. How about you go to the dentist, he fixes your teeth and says "look man, if you smile on camera in a different country you owe me money". Design is a service that ends with a payment, its not art. Its not the Mona Lisa.
    – Lucian
    Jun 13, 2018 at 12:07
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    @Dom You're right that a non-profit doesn't have to be for a good cause, but "a good cause" is determined by each individual. There is no objective "good cause." It is all subjective. OP mentioned in his post that It is a cause I believe in so I would like to help them succeed.
    – Darrick Herwehe
    Jun 13, 2018 at 12:24
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    For a little more clarity, the event makes quite a bit of money for the non-profit (which is not, in fact, a charity). I have worked with them for a few years now, and they earn more and more money from the event each year, but they still budget very little for outside work and instead rely on donations. This is fine, but it is difficult when they can't scrounge up enough to pay for a proper logo, considering how much free work I have done for them (again, they are not a charity, but they are involved in education - they charge for members and receive grants).
    – Esther
    Jun 13, 2018 at 17:25
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    I considered just not doing the job, but thought I could include a clause in the contract instead, to try and split the potential profits with them, considering they can't "afford" to pay a reasonable amount at the moment.
    – Esther
    Jun 13, 2018 at 17:27
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Chalk it down to "Charitable Giving"

In every persons life we have an opportunity to help out charities and not-for-profits. If you believe in the cause, and it sounds like you do as you are giving a large discount, then just go the whole hog for this customer this time and don't stress about it.

Some general tips for "Charitable Giving" Though:

  1. Set boundaries so that you set limits on the amount of work that is expected of you. This will help with the inevitable "OP is giving this for free, let's ask for more"
  2. Be clear about what you are giving away for free and why you are charging what you are charging
  3. Keep a list of projects that you have completed, and what you gave away. You may one day require this reasons ranging from tax deductions to portfolio updates/marketing yourself.
  4. Don't do too much - You want to make sure you are giving work to causes you believe in in the same way that you would hand out cash from your wallet. You are (presumably) a business and want to support, but still charge for your work and need to have ample time, availability for paid work.
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Give It a Restrictive Licence

I also don't believe that charging royalties is the way to go. I do believe that you could simply give them a license that only allows usage for a particular event, usage model, Singular T Shirt design etc.

You can also add in the option to "Upgrade" the license if it turns out they want to use the design for bigger and better things once it starts gaining traction.

More information from the internet

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